Saudi Arabia and Indonesia this week signed preliminary agreements for investments worth $27 billion in oil, petrochemicals, and alternative energy, during a visit by Indonesian President Prabowo Subianto to the kingdom, where he was hosted by Crown Prince Mohammed bin Salman..
The amount of total investment being discussed is close to the trade turnover between the two countries over the last five years, which stood at $31.5 billion, according to Reuters. Among the deals being discussed is a low-carbon energy venture between Saudi ACWA Power and Indonesia’s sovereign wealth fund Danantara and state oil major Pertamina.
Danantara said the size of the investment under discussion was $10 billion.
Saudi Arabia has been working to secure long-term demand for its top export commodity through partnerships in countries that consume a lot of oil. China has been among them, as have other Asian nations such as India, with which the Saudis are currently in talks for the construction of a new refinery. Last November, Aramco and Sinopec broke ground on their joint $10-billion refinery project.
Indonesia, for its part, has been seeking to boost its oil and gas production to counter a decline in output that has been advancing for years. Earlier this year, the country awarded five oil and gas blocks to international operators as part of these efforts to reverse its transformation from a net exporter of oil into a net importer.
The country is currently producing around 600,000 barrels of crude daily but wants to boost this to 1 million bpd by 2030, through both new exploration and production revival at old wells. To that end, Indonesia is inviting oilfield service providers that have the technology to turn idle wells into producing ones again to partner with local industry players. The government is also planning to offer another 74 new oil and gas blocks to potential developers.
By Irina Slav for Oilprice.com
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